4 ms·

You think that dis-intermediating banks for electronic funds transfer is not an application?

by darawk 8y ago

acdha 8y ago
Okay, let’s see: how does that benefit me in real, tangible terms? What risks does it have - for example, do users take on responsibility for fraud risk?
- darawk 8y ago
  > Okay, let’s see: how does that benefit me in real, tangible terms? It allows you to store and transfer value in situations where you either cannot obtain, or do not trust your available banking relationships. You also have much, much lower fees for international remittance. > What risks does it have - for example, do users take on responsibility for fraud risk? It has two primary risks: - Transaction finality. This is a positive and a negative, of course. - Risk that you improperly handle your private key and have your funds stolen.
  - killjoywashere 8y ago
    So, if, say you own some underutilized hydropower in China it's a good way to exfiltrate value from that economy and turn it into some slightly less volatile asset, like Ferarris or beach real estate in Florida?
    - darawk 8y ago
      You could use it for that, sure. Though i'd probably recommend the standard channels of offshore corporations for something like that.
  - acdha 8y ago
    > It allows you to store and transfer value in situations where you either cannot obtain, or do not trust your available banking relationships. This is already a small percentage of people but it’s smaller still when you realize that it requires full access to the blockchain network and a solid local network of people who accept it and/or convert into local currency at low rates, not to mention that since the model is so well-suited to support oppressive regimes you’re really only talking about people who live in countries which have collapsed into disfunction but not authoritarianism. > You also have much, much lower fees for international remittance. From whom? What are the actual rates? > Risk that you improperly handle your private key and have your funds stolen. This is a big caveat for most people since “handle improperly” actually means “never use buggy or untrustworthy software, get mugged, etc. The benefits listed above don’t apply to most people enough to be worth that big of a risk transfer.
    - darawk 8y ago
      > From whom? What are the actual rates? The rates are the cost of buying/selling bitcoin on both ends, let's call that 20 bps on each side, and then the cost of a single bitcoin network transaction, which is about 66 cents at the moment, if you're willing to wait 6 blocks [1]. So, to send $1000 it'll cost you 40 bps + 66 cents = $4.66. By comparison, international wires at your local bank will run you around $50 all in [2]. That's quite a savings. 1. https://bitcoinfees.info/ https://bitcoinfees.info/ 2. https://smartasset.com/checking-account/average-wire-transfer-fee https://smartasset.com/checking-account/average-wire-transfe... > This is a big caveat for most people since “handle improperly” actually means “never use buggy or untrustworthy software, get mugged, etc. The benefits listed above don’t apply to most people enough to be worth that big of a risk transfer. Sure, and those are real challenges of using cryptocurrencies right now. However, they're also extremely solvable problems and people are working on them.
      - acdha 8y ago
        > The rates are the cost of buying/selling bitcoin on both ends, let's call that 20 bps on each side, and then the cost of a single bitcoin network transaction, which is about 66 cents at the moment, if you're willing to wait 6 blocks [1]. So, to send $1000 it'll cost you 40 bps + 66 cents = $4.66. Don’t forget to add in the currency conversion fees on either side since most people transfer money to use it. Walmart charges $8 for the same service. There is some potential savings here but it seems unlikely to argue that Bitcoin’s enormous costs can be justified by the number of people who need to regularly do international transfers and, if everything is lucky, save a dollar or two on the transfers. > Sure, and those are real challenges of using cryptocurrencies right now. However, they're also extremely solvable problems and people are working on them. “Extremely solvable” but unsolved a decade later suggests that they are not in fact that easy and will end up making the cost even less competitive. People have been preaching that Bitcoin will take over for years but even most advocates don’t use it for a non-token percentage of their transactions because it’s simply not financially sensible to do so.
        darawk 8y ago
  - JumpCrisscross 8y ago
    > much, much lower fees for international remittance This is patently false. My bank, Fidelity, lets me send domestic wires (which are virtually instantaneous) for free. (Fedwires actually cost most customers virtually nothing.) International wires aren't that much more expensive, with the majority of the cost for small transactions being antifraud. In that respect, every cryptocurrency is orders of magnitude more expensive than the status quo.
    - mycall 8y ago
      Is "wires" the technical term, as I can't find this at my bank.
      - oralty 8y ago
        I read your comment history... something about TRS-80s. So probably older than 40 and American. I am truly amazed that someone could live that long with economic means to post here and not know what a bank wire is! Just google it though. It's the most common way to send moderate sums of money in the world. And yes, pretty much any retail bank or credit union will offer wiring, probably for a fee.
      - deleted 8y ago
        [deleted]
    - darawk 8y ago
      > This is patently false. My bank, Fidelity, lets me send domestic wires (which are virtually instantaneous) for free. (Fedwires actually cost most customers virtually nothing.) International wires aren't that much more expensive, with the majority of the cost for small transactions being antifraud. In that respect, every cryptocurrency is orders of magnitude more expensive than the status quo. Perhaps your bank is different, but googling "international wire cost" brings up links like these: - https://smartasset.com/checking-account/average-wire-transfer-fee - https://www.nerdwallet.com/blog/banking/wire-transfers-what-banks-charge/ I do see that you are correct about Fidelity. However, what's clear is that Fidelity is an outlier. I don't know why or how they are able to offer that, but it certainly isn't the norm. And sending a remittance payment in Bitcoin is cheaper than any of the others listed.
Avshalom 8y ago
unless you can spend the bitcoin, raw, then you now have two intermediaries: the currency-bitcoin on your end and the bitcoin-currency on the other end.
- darawk 8y ago
  You can spend bitcoin. With regards to the two-intermediaries point though, that can be preferable to the one in some situations (e.g. international remittance).

You think that dis-intermediating banks for electronic funds transfer is not an application?

by darawk 8y ago

You think that dis-intermediating banks for electronic funds transfer is not an application?

Okay, let’s see: how does that benefit me in real, tangible terms? What risks does it have - for example, do users take on responsibility for fraud risk?

darawk 8y ago
> Okay, let’s see: how does that benefit me in real, tangible terms? It allows you to store and transfer value in situations where you either cannot obtain, or do not trust your available banking relationships. You also have much, much lower fees for international remittance. > What risks does it have - for example, do users take on responsibility for fraud risk? It has two primary risks: - Transaction finality. This is a positive and a negative, of course. - Risk that you improperly handle your private key and have your funds stolen.
- killjoywashere 8y ago
  So, if, say you own some underutilized hydropower in China it's a good way to exfiltrate value from that economy and turn it into some slightly less volatile asset, like Ferarris or beach real estate in Florida?
  - darawk 8y ago
    You could use it for that, sure. Though i'd probably recommend the standard channels of offshore corporations for something like that.
- acdha 8y ago
  > It allows you to store and transfer value in situations where you either cannot obtain, or do not trust your available banking relationships. This is already a small percentage of people but it’s smaller still when you realize that it requires full access to the blockchain network and a solid local network of people who accept it and/or convert into local currency at low rates, not to mention that since the model is so well-suited to support oppressive regimes you’re really only talking about people who live in countries which have collapsed into disfunction but not authoritarianism. > You also have much, much lower fees for international remittance. From whom? What are the actual rates? > Risk that you improperly handle your private key and have your funds stolen. This is a big caveat for most people since “handle improperly” actually means “never use buggy or untrustworthy software, get mugged, etc. The benefits listed above don’t apply to most people enough to be worth that big of a risk transfer.
  - darawk 8y ago
    > From whom? What are the actual rates? The rates are the cost of buying/selling bitcoin on both ends, let's call that 20 bps on each side, and then the cost of a single bitcoin network transaction, which is about 66 cents at the moment, if you're willing to wait 6 blocks [1]. So, to send $1000 it'll cost you 40 bps + 66 cents = $4.66. By comparison, international wires at your local bank will run you around $50 all in [2]. That's quite a savings. 1. https://bitcoinfees.info/ https://bitcoinfees.info/ 2. https://smartasset.com/checking-account/average-wire-transfer-fee https://smartasset.com/checking-account/average-wire-transfe... > This is a big caveat for most people since “handle improperly” actually means “never use buggy or untrustworthy software, get mugged, etc. The benefits listed above don’t apply to most people enough to be worth that big of a risk transfer. Sure, and those are real challenges of using cryptocurrencies right now. However, they're also extremely solvable problems and people are working on them.
    - acdha 8y ago
      > The rates are the cost of buying/selling bitcoin on both ends, let's call that 20 bps on each side, and then the cost of a single bitcoin network transaction, which is about 66 cents at the moment, if you're willing to wait 6 blocks [1]. So, to send $1000 it'll cost you 40 bps + 66 cents = $4.66. Don’t forget to add in the currency conversion fees on either side since most people transfer money to use it. Walmart charges $8 for the same service. There is some potential savings here but it seems unlikely to argue that Bitcoin’s enormous costs can be justified by the number of people who need to regularly do international transfers and, if everything is lucky, save a dollar or two on the transfers. > Sure, and those are real challenges of using cryptocurrencies right now. However, they're also extremely solvable problems and people are working on them. “Extremely solvable” but unsolved a decade later suggests that they are not in fact that easy and will end up making the cost even less competitive. People have been preaching that Bitcoin will take over for years but even most advocates don’t use it for a non-token percentage of their transactions because it’s simply not financially sensible to do so.
      - darawk 8y ago
- JumpCrisscross 8y ago
  > much, much lower fees for international remittance This is patently false. My bank, Fidelity, lets me send domestic wires (which are virtually instantaneous) for free. (Fedwires actually cost most customers virtually nothing.) International wires aren't that much more expensive, with the majority of the cost for small transactions being antifraud. In that respect, every cryptocurrency is orders of magnitude more expensive than the status quo.
  - mycall 8y ago
    Is "wires" the technical term, as I can't find this at my bank.
    - oralty 8y ago
      I read your comment history... something about TRS-80s. So probably older than 40 and American. I am truly amazed that someone could live that long with economic means to post here and not know what a bank wire is! Just google it though. It's the most common way to send moderate sums of money in the world. And yes, pretty much any retail bank or credit union will offer wiring, probably for a fee.
    - deleted 8y ago
      [deleted]
  - darawk 8y ago
    > This is patently false. My bank, Fidelity, lets me send domestic wires (which are virtually instantaneous) for free. (Fedwires actually cost most customers virtually nothing.) International wires aren't that much more expensive, with the majority of the cost for small transactions being antifraud. In that respect, every cryptocurrency is orders of magnitude more expensive than the status quo. Perhaps your bank is different, but googling "international wire cost" brings up links like these: - https://smartasset.com/checking-account/average-wire-transfer-fee - https://www.nerdwallet.com/blog/banking/wire-transfers-what-banks-charge/ I do see that you are correct about Fidelity. However, what's clear is that Fidelity is an outlier. I don't know why or how they are able to offer that, but it certainly isn't the norm. And sending a remittance payment in Bitcoin is cheaper than any of the others listed.

Avshalom 8y ago

unless you can spend the bitcoin, raw, then you now have two intermediaries: the currency-bitcoin on your end and the bitcoin-currency on the other end.

darawk 8y ago
You can spend bitcoin. With regards to the two-intermediaries point though, that can be preferable to the one in some situations (e.g. international remittance).